Air Products, Poland's Ciech at odds over $560m TDA contract

17 October 2012 17:55  [Source: ICIS news]

LONDON (ICIS)--Air Products is resisting a request from Poland's Ciech to terminate the remaining five years of a seven-year contract worth around $560m (€431m) for supplies of toluene diamine (TDA) feedstock, the US-based industrial gases and chemicals corporation said on Wednesday.

On 13 October, Ciech informed Air Products that it intended to cancel the agreement due to claimed breaches of contract in the supply of TDA, used by subsidiary Zachem in the production of toluene diisocyanate (TDI).

Ciech, which on 15 October announced that Zachem would move out of the TDI business in the wake of a deal with BASF which includes a TDI non-competition obligation, alleged the contractual breaches included Air Products failing to source TDA from its Pasadena facility.

Another alleged breach was “the failure to provide adequate assurance that Air Products will continue to supply TDA from its Pasadena facility”.

In a statement, Air Products said it “has been diligently fulfilling its obligations to Ciech, ensuring timely and uninterrupted supplies of TDA as stipulated in our contract”.

The statement continued: “We have continued to supply the TDA at the same specification, in an even more cost effective way, in response to requests to assist Zachem during their well publicised financial difficulties. The product fulfils all the quality criteria stipulated in the contract with Ciech. Air Products remains absolutely committed to meeting its contractual obligations to supply Ciech, which runs through to 2018.”

Air Products added that it has been supplying TDA to Zachem since the early 1990s.

($1 = €0.77)

By: Will Conroy
+44 20 8652 3214

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